Finweek English Edition - - Companies & Markets -

STEIN­HOFF CEO Markus Jooste – and sev­eral other direc­tors and ex­ec­u­tive mem­bers – bought par­tic­u­larly large quan­ti­ties of shares in the com­pany in June last year through sin­gle stock fu­tures at a price of around 2200c/Stein­hoff share. That caused raised eye­brows and, per­haps wrongly or per­haps com­pletely cor­rectly, gave the im­pres­sion the direc­tors were tak­ing up danger­ous and ex­cep­tion­ally large spec­u­la­tive po­si­tions in the share.

The graph of Stein­hoff’s share price shows it wasn’t such a good trans­ac­tion. By Novem­ber 2007 the par­tic­i­pants closed their po­si­tions in the sin­gle stock fu­tures by tak­ing up the un­der­ly­ing shares.

How­ever, the trans­ac­tion seems to have given the mar­ket the im­pres­sion of spec­u­la­tive action by Stein­hoff’s board – and that’s per­haps the rea­son why in­vestors’ rat­ing of the or­di­nary shares is still some­what tense.

How­ever, the com­pany and other or­di­nary share­hold­ers suf­fered no loss from the direc­tors’ spec­u­la­tive – pos­si­bly mis­placed – con­fi­dence in its share price. In fact, share­hold­ers should wel­come it when direc­tors them­selves buy shares in the com­pany on the JSE, rather than grant­ing them­selves fat share op­tions.

Liv­ing dan­ger­ously. Markus Jooste

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